Is this the start of rampant price inflation in America?
On Wednesday, the Bureau of Labor Statistics (BLS) reported that the annual inflation rate hit a 12-month high, rising to 1.7 percent in February, up from 1.4 percent in January. This is in line with what economists had anticipated.
Last month’s rising inflation was driven mostly by higher prices for energy, food, health care, and shelter. But apparel prices fell and the cost of new vehicles eased a bit.
Producer prices data will be released on Friday. Market analysts are forecasting an annualized producer price index (PPI) of 2.7 percent.
This comes days after Federal Reserve Chair Jerome Powell conceded that inflation is on the way, reversing an earlier position that essentially dismissed inflation. He noted that higher prices could occur as a result of the U.S. economy reopening in the aftermath of the COVID-19 public health crisis.
He has denied that creating $7 trillion in a year adds to inflation.
Whatever the case, this could be the start of the inflation bomb that will go off in the world’s largest economy.
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